2016 IoT Predictions

To inaugurate ESG's expanded coverage of IoT, I recently sat down with my colleague Nik Rouda to discuss our 2016 predictions for the Internet of Things. In the video, Nik and I discuss the potential for unleashing business value from IoT, how wearables can fit into enterprise IoT and app initiatives, and the expanding role of industrial technology players in the IoT ecosystem.

Also, stay tuned for Nik's video on predictions for the big data marketplace, which will have significant implications for IoT.

Video transcript:

Voiceover: The following is an ESG 360 video.

Nik: Welcome! Here at ESG, we're thinking about 2016 and what are going to be the big technology trends of the year. Today's topic is going to be Internet of Things and joining me is our new analyst, Gene Signorini. He's just joined ESG, and we're really excited to have him on board for his years of experience. Gene, tell me, what do you see coming up this year?

Gene: Well, it's something I'm hoping to see really, more than anything is starting to talk less about technology in IoT and much more about business value. So, 2015 I think was the year when all the big IT players announced some sort of IoT initiative. Whether it was IBM, Microsoft, Cisco, Amazon, Oracle, all kind of talked about IoT in their messaging. And it seemed like everybody and their mother launched an IoT platform. And now, obviously, that creates a tremendous amount of confusion in the marketplace. And it's really unclear who's really delivering some value here.

And so I think in 2016, these vendors, these big IT vendors really need to start talking about business value. And our research shows that there's four buckets that IoT value will bring to enterprises. Your first is operational efficiency. How does it make the things we do already much better, quicker, lower cost? The second is customer engagement and customer experience, right? How can we use the data that we have to understand our customers better and make our products and solutions better or provide data to our customers that kind of makes them understand us better?

The third is, how do we enhance products and services that we already deliver in the market through connectivity? And then the fourth is, how can we launch new business processes, right? Or entirely new business models using connected technologies? So, I really think that these IT vendors, big or small, really need to start translating, "Okay, how can my technology really help businesses do these four things?"

Nik: Okay, that makes sense. And one thing I think about when I think IoT is...you said customer. I think consumer sometimes. And when I think consumer, I think about wearables, like Fitbit, Google Glass, which they're coming around, maybe now Oculus Rift. Do you see wearables as a big part of the IoT like that?

Gene: Yeah, absolutely. Now, you can think about wearables as part of IoT today, right? Internet of Things, it's anything that's connected. But wearable hype has been going on the last couple of years and mostly in consumer and mostly in kind of fitness and wellness and all of that stuff. But the reality is, I think wearables are ready to go to work in some ways. And if you think about it, wearables can become that conduit between people and the things that are around them.

So an example is Ford, the auto manufacturer. In Ford labs, they're trying to think about ways that wearables and sensors can communicate and interact with their Driver Assist technology. So imagine an environment in which the car can actually detect whether the driver's getting tired, right? Whether their awareness is lower and share that data back to the vehicle and the Driver Assist technology, very powerful. Or think about it an industrial environment, right? In manufacturing or oil and gas where a worker is actually using a heads-up display to receive information from the equipment around them. So, these are examples of where wearables really now become a broader part of that IoT ecosystem.

Nik: I like that, wearables that work.

Gene: Yup.

Nik: It's a good line.

Gene: They need to start working for someone.

Nik: Absolutely. Now, I was curious, you mentioned Ford. I don't really think of Ford as an IT company. How did they come into play?

Gene: Well, it's really interesting. And I think that's the third prediction here is, if 2015 was the year when the big IT vendors stake their claim in IoT, I think 2016 is when the large industrial technology companies will really begin to position themselves and show the world that they are in this space. GE has already been a leader at the forefront of this. If you've seen any of the GE television commercials where they've got that young programmer who's now going to work for GE and everybody's baffled as to why, well GE's actually rebranded itself as a digital industrial company. And so, many of these large industrial technology firms have already been in the space, we call it the Industrial Internet.

So if you're Honeywell or Johnson Controls or Bosch or Siemens, you've already been doing some of these things. But now it's about really, A, positioning yourselves as a leader in this category and saying, "Hey, we belong. We talk the talk of our customers. We're already building all of these technologies. And these are really operating technologies."

And so in a large way, IoT is the intersection of these operating technologies and information technologies or, more accurately, information and communication technologies. And that's going to create some very interesting dynamics in the ecosystem. We may see acquisitions, some of these large industrial players buying more technology-oriented companies in the IoT space and coopetition between some of the large IT vendors and the large industrial players. So, it's going to be very interesting to watch how that evolves.

Nik: So it sounds like 2016 is going to be the year IoT goes big in business. Be really exciting to watch that. And I think, as you get the commercial applications going, it'd be even better. Now, of course, one thing is IoT is supported by big data. So, if you haven't yet watched the ESG video on 2016 predictions for big data, check that out next.

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Topics: Internet of Things Data Platforms, Analytics, & AI